Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (13446)	10/14/2004 10:44:58 AM
From: russwinter	of 116555

<When and how do you see global demand outside the US picking up?> This question gets to the heart for the reason for Asian repegs and getting off dependency on the USD. The difficulty will be the transformation, which will take the form of a Bust at this stage, no question. But the policy to kick this process off, would be to test currency floats. Presuming the Asian currencies were revalued 10-15% higher a year, consumers there would see a proportionate increase in their standard of living, which they could spend on better food, better medical care, and maybe even a few discretionary consumer items. Perhaps with higher standards of living, they could also start addressing tragedy of the commons issues like this one, instead of driving off a cliff: Message 20638326 It would start the gradual process towards a much more balanced, less US centric world economy (basically the Steve Roach points). The US would just have to start from scratch and figure out ways to be a player in a less US centric world, as just issuing "debt" and "finance" ain't it. <which decade?> I believe quite soon.

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